Lords say water prices could rise to pay for meters - while Minister tells households to recycle water

Water prices will have to rise to stop people taking too many baths or watering the garden, according to peers.

Such a step, which amounts to rationing by price, will alarm families who have put up with a succession of inflation-busting price rises over the past 20 years.

Consumers have contributed some £100billion through punishing increases in their bills since the water industry was privatised in 1989. However, the suppliers still can't guarantee to keep the taps and hoses running in dry years.

Back in business: This boat hire firm is able to operate on Bewl Water Reservoir in Lamberhurst in Kent today in stark contrast to six weeks ago at the same spot, below, after heavy rainfall pushed the water level up

Environment Secretary Caroline Spelman
has warned that families may have to rely on standpipes in the streets
next year if the UK gets a third dry winter in a row.

However, Mrs Spelman and the
Government stand accused of failing to have any strategic plan to head
off such a drastic situation.

She suggested policy should focus on
saving and recycling – by using shower or rainwater to flush the toilet
or water the garden.

The Government has been accused of
doing too little to support the building of new reservoirs or the
creation of a grid to shift water to areas in need. At the same time,
Ministers allow firms to waste 25 per cent of treated water through
leaks.

Consumer groups say this is too lenient and the figure should be
10 per cent.

Official figures put the total wasted
at 3.3billion litres – 726million gallons – every day of the year. That
is enough to supply 7.3million families for a day.

The call for higher
prices came from the House of Lords Agriculture, Fisheries and
Environment EU Sub-Committee in a report – An Indispensable Resource –
published yesterday.

The all-party committee is chaired by the multi-millionaire Labour peer, Lord Carter of Coles.

Its list of recommendations include
the statement: 'The Government must allow the cost of water to increase
where other measures to tackle water scarcity have failed.'

Lord Carter added: 'Having taken our
water resources for granted for so long, we must start looking at ways
in which we can protect the quality and availability in the face of
challenges such as climate change and population growth.

'Price increases may well be an inevitable part of helping to secure our water supplies.'

Any such scheme will involve the
roll-out of water meters, something water companies in the south and
east of England are already doing.

However, the official customer body,
the Consumer Council for Water, said the public is not prepared to see a
new round of price rises.

Chairman Dame Yve Buckland said it is
now time for the industry, its investors and shareholders to find the
money to keep the taps running.

'There is a real fear of a third dry
winter,' she said. 'We want to know now what investment companies will
be making to avoid supply problems. We don't think it should be up to
the public to make sacrifices.

'There has been significant investment in the industry since privatisation – some £100billion by customers through their bills.'

Adrian McDonald, professor of
environmental management at the University of Leeds, told the BBC's
Inside Out programme: 'We have never had three dry winters in a row, but
you would expect measures to try to conserve water that would be quite
dramatic.

'There would be standpipes, people's supply would be cut off
and they would have to take buckets and containers to those standpipes.'

Asked what measures were in place to
cope with a third dry winter, Mrs Spelman said: 'We have seen this
coming and have been planning for it.'

This plan includes the current
hosepipe bans, which are due to remain throughout 2012, despite April's
rainfall being the highest on record.